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PulteGroup, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Residential ConstructionSector: Consumer Cyclical

Fair Value Summary

Current Price$124.39
5Y Range138.78 – 217.76
5Y Selected178.27
(-) Safety Margin38.57%
5Y Buy Price$109.51
Upside (to Buy Price)-11.96%
10Y Range237.49 – 378.59
10Y Selected308.04
(-) Safety Margin38.57%
10Y Buy Price$189.23
Upside (to Buy Price)52.13%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9272
Revenue R2 (10Y)0.9707
Net Income R2 (5Y)0.9324
Net Income R2 (10Y)0.9321
EBITDA R2 (5Y)0.9290
EBITDA R2 (10Y)0.9152
FCF R2 (5Y)0.0459
FCF R2 (10Y)0.5402
Safety Score0.6143

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth17.27%15.79%14.32%12.84%11.37%9.90%8.42%6.95%5.47%4.00%
Revenue21,045.9024,369.7027,859.1931,437.6635,012.3438,477.3641,718.0844,616.7747,059.1548,941.52
EBITDA4,165.304,823.145,513.766,221.996,929.487,615.268,256.658,830.349,313.739,686.27
D&A-113.20-131.08-149.85-169.10-188.33-206.96-224.39-239.99-253.12-263.25
EBIT4,052.104,692.065,363.916,052.906,741.157,408.298,032.258,590.359,060.609,423.03
Pro forma Taxes-1,041.27-1,205.72-1,378.36-1,555.41-1,732.27-1,903.71-2,064.05-2,207.46-2,328.30-2,421.44
NOPAT3,010.833,486.343,985.554,497.485,008.885,504.585,968.206,382.896,732.307,001.59
Capital Expenditures-123.40-142.89-163.35-184.33-205.29-225.61-244.61-261.60-275.92-286.96
NWC Investment-2,131.97-2,286.66-2,400.65-2,461.86-2,459.26-2,383.81-2,229.51-1,994.20-1,680.28-1,295.00
(+) D&A113.20131.08149.85169.10188.33206.96224.39239.99253.12263.25
Free Cash Flow868.671,187.871,571.402,020.392,532.663,102.133,718.484,367.085,029.225,682.88
Diluted Shares Outstanding202,166,500.00202,166,500.00202,166,500.00202,166,500.00202,166,500.00202,166,500.00202,166,500.00202,166,500.00202,166,500.00202,166,500.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.49%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF861.141,141.231,383.801,630.821,873.832,103.762,311.462,488.252,626.562,720.43
Raw: 39,252.07
27,804.05
Raw: 88,075.35
40,366.02

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value34,694.8759,507.31
(-) Net Debt467.70467.70
Equity Value34,227.1759,039.61
(/) Shares Out202.17202.17
Fair Value$169.30$292.03
(-) Safety Margin38.57%38.57%
Buy Price$104.00$179.40
Current Price$124.39$124.39
Upside (to Buy Price)-16.39%44.22%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.99%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF860.351,136.451,365.491,594.621,815.602,019.872,199.132,345.832,453.732,518.34
Raw: 31,838.41
21,752.28
Raw: 71,440.29
30,171.68

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value28,524.7948,481.08
(-) Net Debt467.70467.70
Equity Value28,057.0948,013.38
(/) Shares Out202.17202.17
Fair Value$138.78$237.49
(-) Safety Margin38.57%38.57%
Buy Price$85.25$145.89
Current Price$124.39$124.39
Upside (to Buy Price)-31.46%17.29%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.99%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF861.931,146.071,402.531,668.181,934.492,191.962,430.642,640.762,813.332,940.84
Raw: 51,015.92
37,478.98
Raw: 114,471.54
56,975.92

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value44,492.1977,006.66
(-) Net Debt467.70467.70
Equity Value44,024.4976,538.96
(/) Shares Out202.17202.17
Fair Value$217.76$378.59
(-) Safety Margin38.57%38.57%
Buy Price$133.77$232.57
Current Price$124.39$124.39
Upside (to Buy Price)7.54%86.97%

Reverse DCF: Market Implied Growth

Current Price$124.39
WACC Used9.1%
IMPLIED REVENUE GROWTH115.34%
Metric2027202820292030203120322033203420352036
Implied Revenue37,950.1181,723.38175,986.58378,976.97816,105.071,757,435.243,784,535.538,149,779.2017,550,079.9437,793,085.96
Constant Implied Growth115.34%115.34%115.34%115.34%115.34%115.34%115.34%115.34%115.34%115.34%
Implied Free Cash Flow3.808.1717.6037.9081.61175.74378.45814.981,755.013,779.31
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF3.536.6013.0225.7050.73100.13197.65390.14770.071,520.02

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$38.8018.03%$112.50189.94%
20182018-12-31$25.9918.54%$152.84488.08%
20172017-12-31$33.2516.32%$52.5658.08%
20162016-12-31$18.3814.02%$-5.13-127.90%
20152015-12-31$17.8214.76%$-34.95-296.12%
20142014-12-31$21.4620.57%$23.238.24%
20132013-12-31$20.3721.70%$80.56295.47%
20122012-12-31$18.1616.43%$62.33243.20%
20112011-12-31$6.3112.86%$-5.89-193.37%
20102010-12-31$7.5210.83%$30.38303.96%
20092009-12-31$10.008.55%$46.58365.82%
20082008-12-31$10.930.46%$65.89502.86%
20072007-12-31$10.54-16.54%$20.1991.56%
20062006-12-31$33.12-31.57%$-19.71-159.52%
20052005-12-31$39.36-40.12%$-13.38-134.00%
20042004-12-31$31.90-35.32%$-20.54-164.38%
20032003-12-31$23.41-16.74%$-18.69-179.85%
20022002-12-31$11.972.51%$3.58-70.09%
20012001-12-31$11.1716.83%$-76.05-780.87%
20002000-12-31$10.5518.72%$0.18-98.32%
19991999-12-31$5.6314.20%$-6.07-207.85%
19981998-12-31$6.9511.93%$-45.91-760.56%
19971997-12-31$5.2314.59%$-9.88-288.88%
19961996-12-31$3.8417.14%$-13.33-447.22%
19951995-12-31$4.2319.35%$-8.00-289.01%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$305.13
Median
$292.15
10th Percentile
$236.51
90th Percentile
$385.27

Fair Value Distribution

$182.74 - $212.56
20
$212.56 - $242.38
114
$242.38 - $272.20
204
$272.20 - $302.02
217
$302.02 - $331.84
177
$331.84 - $361.65
115
$361.65 - $391.47
60
$391.47 - $421.29
46
$421.29 - $451.11
15
$451.11 - $480.93
12
$480.93 - $510.75
5
$510.75 - $540.57
4
$540.57 - $570.39
2
$570.39 - $600.21
2
$600.21 - $630.03
1
$630.03 - $659.85
1
$659.85 - $689.67
3
$689.67 - $719.49
1
$719.49 - $749.30
0
$749.30 - $779.12
1